2/ Back in August 13F institutions sold about 60m shares and reduced their allocation of the TSLA float from 60% to 51%, probably against short-term momentum traders & retail. Volume was ~90m shares/day.
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If we revisit the TSLA volume comparison between the +$200 stock-split rally back in August and the current S&P 500 addition one, it's striking how much lower trading volume TSLA required to move by +$200 recently.
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(Cc: @garyblack00, @ReflexFunds)https://twitter.com/truth_tesla/status/1335250474031833088 …
Different way of looking at the TSLA S&P 500 announcement rally, by comparing it to the similar August rally:
~90m shares/day, total 1,350m volume, vs.
~37m shares/day, total 481m shares.
Important: significant extended hours trading volume is included in my figures.
1/ https://twitter.com/garyblack00/status/1335221436596838403 … pic.twitter.com/TvhmMK8aPt
~90m shares/day, total 1,350m volume, vs.
~37m shares/day, total 481m shares.
Important: significant extended hours trading volume is included in my figures.
1/ https://twitter.com/garyblack00/status/1335221436596838403 … pic.twitter.com/TvhmMK8aPt
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3/ The S&P 500 inclusion rally on the other hand only triggered about ~37m shares/day volume to move it by +$200, as momentum traders, retail & institutionals all are accumulating TSLA shares.
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4/ I think it's a reasonable inference & coarse approximation of the trading flows that in August+September TSLA was moved up +$200 and then corrected by -$100, against a net institutional selling of 30m shares in the up leg & 30m shares selling during the consolidation.
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5/ During the S&P 500 inclusion rally, momentum, retail and institutional traders are likely on the same side: buying. So if we assume that daily volume scales linearly with accumulation rate, we can (coarsely) estimate the S&P 500 positioning of the parties.
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6/ So here are the equations: • ~30m extra hard-selling by institutions in August increased daily volume roughly by a factor of 2. • if we simply remove that selling, we get half the volume. This suggests the current accumulation rate is about 30m shares per +$200 price Δ.
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7/ I.e. under these (imprecise) assumptions only about 30m out of the 120m shares required for S&P 500 inclusion have been accumulated so far. Even if we double the estimated accumulation rate out of abundance of caution, we only get 50% of the required 120m shares @ $600.
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8/ 60m shares accumulated assumes that about 8% of the float already decided that these TSLA price levels are as good as it gets, there's no further rise, there's no point in waiting for S&P 500 inclusion to get closer, and sold their shares in the $450-$600 price range.
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9/ 𝐓𝐋;𝐃𝐑: if true then there could still be quite a bit of TSLA rally until December 18 - maybe afterwards too if index funds miscalculated. I think $650-$700 might be in play next week already, if macro conditions are favorable. (If false then $600 was the top.
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End of conversation
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My only comment is while we know this. Why isn’t more big money flowing in to capitalize on this? Playing the other side: What are they doing or what do they know that prevents more money from flowing in? Or are they simply not smart enough to figure this out?
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So the bear argument is: • My estimates are wrong and big money already flowed in during the +$200 rally and the S&P 500 addition is priced in - might even be overpriced. • $600 was the top and new smart money is not moving in because they see that TSLA is over-speculated.pic.twitter.com/Pj091ogP9r
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